Wipfli has released its 2025 manufacturing benchmarking study, offering a comprehensive look into the state of North American manufacturing. Conducted annually since 2016, the study provides critical insights into performance trends, operational benchmarks and strategic priorities across sectors, including plastics processors, metal formers, die casters, tool builders and contract machinists.

This year's survey analyzed responses from 285 locations across 249 companies, examining finance, operations, HR and sales performance. Top performers — those with the highest profit and throughput over five years — were highlighted, along with industry sentiment, investment trends and key challenges. Despite a Q2 dip in sentiment due to tariff concerns, manufacturers are working to stabilize operations and prepare for future shifts.

"Manufacturers are doing their best to hold on in a tough environment," said Laurie Harbour, Wipfli partner.

"Manufacturers are doing their best to hold on in a tough environment," said Laurie Harbour, Wipfli partner. "While some are hiring, it's often out of necessity rather than growth. The industry must act swiftly to improve operations and navigate uncertainty."

Industry sentiment and economic outlook

Manufacturers entered 2025 with cautious optimism, but sentiment declined sharply in the second quarter. The most frequently cited concerns included raw material tariffs, inflation, recession risk and the rising cost of doing business. While inflation and wage pressures remain, their severity has lessened compared to 2024.

"Tariff uncertainty is weighing heavily on decision-making," Harbour said. "But we're also seeing manufacturers take control where they can — through cost management, efficiency and targeted investment."

Despite margin pressures, manufacturers continued to demonstrate strong operational discipline. Efficiency among top performers averaged $139,800 per employee in 2024, only slightly below the 2023 peak of $143,593. Median EBIT for top performers held steady at 7.8%.

Debt-to-earnings ratios showed that 46% of manufacturers remain in a bankable position,23% identify as somewhat bankable while 31% fall into the "questionably bankable" category.

Labor and SG&A costs remain problematic, and responses around hiring reflect the uncertain market. While 37% of manufacturers reported hiring for growth or open positions, this activity is occurring despite persistent market challenges and flat profitability. The fact that 38% maintain current staffing levels underscores a cautious approach, with many companies opting to avoid additional labor costs until economic conditions improve.

Forecasted capacity utilization for Q2 2025 was 63%, but actuals came in at 53% — the largest delta observed in recent years. This gap reflects a broader "wait-and-see" approach, as manufacturers delay new product launches and inventory increases.

Capital expenditure plans also reflect this caution. While manufacturers invested in automation and digital technologies in 2024 despite high interest rates, plans for 2025 are more conservative as companies await clarity on trade and tariff policy.

Sales performance remains a challenge, but quote activity is on the rise. Hit rates across all manufacturing sectors averaged 11.2% (by number of quotes), with plastics processors leading at 12.2%. This increase in quoting suggests that customers are exploring reshoring options and testing new supplier relationships — but not necessarily committing to new orders.

Churn, particularly in the automotive sector, continues to impact manufacturers. OEMs are rationalizing product lines, leading to reduced volumes and the elimination of certain trim levels.

While profitability remains flat and capacity utilization fell short of forecasts, manufacturers are taking steps to organize their businesses and manage costs. Debt-to-earnings ratios are being closely monitored, and many companies are focusing on waste reduction, labor optimization and smarter scheduling.

"Even in a tough environment, manufacturers are showing they can adapt," Harbour added. "The key is to stay proactive — not reactive — and focus on what's within your control."

The benchmarking study is available exclusively to manufacturers who participate in at least one section of Wipfli's manufacturing benchmarking survey. It includes detailed analysis by functional area — finance, operations, human resources and sales — and commentary from Wipfli advisors who work closely with the businesses surveyed.

For more information, visit wipfli.com/manufacturing.